Update - July 19, 2001

Elliot Diringer[1], a veteran environmental journalist and a deputy press secretary in the Clinton White House, is now director of international strategies at the Center. This column is being written in cooperation with Grist Magazine[2].

Thursday, 19 Jul 2001

BONN, Germany About a year ago, Bob Page and his wife were hiking high in the Canadian Rockies in an area they had last visited 10 years before. Approaching a vast expanse of ice known as the Saskatchewan Glacier, they were stunned by what they saw.

"The glacier had retreated about a kilometer," he told me. "Suddenly, there was a new valley there we hadn't seen before. That sight was just so powerful." Page knew instinctively that he was viewing stark evidence of global warming.

Today, Page is hiking the corridors of a stuffy conference center half a world away. He is one of the thousands gathered here in hopes of resuscitating the global drive to keep the world's glaciers intact and avert the many other threats posed by our planet's warming.

Page, however, is not part of the army of environmental NGOs whose representatives routinely buttonhole negotiators and issue press statements hounding governments to action. He is a company man, a vice president for the Canadian-based TransAlta Corp., one of North America's largest emitters of greenhouse gases.

His message, nonetheless, is much the same: Serious consequences await us unless governments and businesses alike get down to the job of protecting our climate. TransAlta, Page said, is fully committed to doing its part. The electric power provider, which generates much of its energy by burning coal, has set a goal of reducing net carbon emissions from its Canadian operations to zero by 2024.

Claims of corporate commitment to the environment are often greeted with skepticism by greens and the public, frequently with good reason. But one of the most profound shifts in the climate debate in recent years is the emergence of leading corporations that don't simply talk the talk -- they are also taking concrete steps to cut emissions and calling on governments to step up their efforts.

To be sure, there are powerful corporations that continue to dispute the scientific evidence of climate change and oppose real efforts to address it. Their views seem to hold sway at the highest levels in Washington. But a growing number of others, including TransAlta and 35 other major corporations[3] we work with at the Center, are stepping up to the climate challenge.

Many of them are here pressing their case. They want a strong international agreement that sets binding targets for reducing emissions. They also want clear, sensible rules that allow for emissions trading, carbon sequestration, and other creative approaches that will enable countries and companies to meet those targets without sending economies or profits into a tailspin.

As ministers arrived here today, and the talks turned from "technical" to "political" issues, the odds still appeared low for such an agreement being struck here in Bonn. The goal is to agree on rules for implementing the Kyoto Protocol so countries can weigh ratifying the treaty, even though the U.S. has rejected it. While negotiators reported progress on some issues, big differences remain on the tougher ones and, in some cases, positions appear to be hardening.

Companies are addressing climate change for a host of reasons. Many are taking a long-term strategic view -- picturing how the world will look decades from now and how they can best position themselves in it. Some, like major insurers, see enormous risk from the potentially catastrophic impacts of a warming climate. Some companies see profit potential in marketing renewable energy and energy-saving technologies, or in becoming brokers in the emerging emissions-trading market. Some simply accept that mounting scientific evidence and public pressure will eventually lead to stiffer government controls. After three decades of environmental wrangling, these companies have learned that they're better off engaging early to help shape rules that are both effective and workable.

TransAlta is counting on good rules to help meet its zero-emissions target. Although the company is investing in renewable energy and new technologies to capture and bury carbon from the coal it burns, its strategy depends heavily on "offsets" -- essentially, paying for actions to reduce or avoid carbon emissions elsewhere as a way of compensating for its own releases.

In one of its more novel projects, TransAlta is supporting a company in Uganda that will market a feed supplement to help cattle digest their food better. Healthier cattle not only produce more and better meat and milk, but they also emit less methane, a powerful greenhouse gas. TransAlta is also one of the pioneers in emissions trading, forging the first trans-Atlantic carbon trade last year with a German electric firm.

But the company will not get emissions "credit" for such transactions unless governments agree on rules for trading and other offset mechanisms. "Unless the market mechanisms are in place," said Page, "it just won't happen."

Even as governments waver, however, financial markets are beginning to recognize the long-term risk of rising carbon emissions and reward companies taking steps to minimize them. Earlier this year, Page said, stock analysts quizzed TransAlta on its carbon outlook. "This was the first time in history we'd been questioned by analysts on our policies in this area," he said.

Failure here in Bonn will be disappointing, but it will not deter TransAlta from its carbon-cutting strategy, according to Page. "A global agreement of some kind is very important to us as a company," he said. "If Kyoto does not survive, we hope the son or daughter of Kyoto will emerge soon."